Introduction
Palm Springs, California, is renowned for its warm weather, stunning desert landscapes, and vibrant tourism industry. The city has become a popular destination for short-term rentals, attracting visitors from various parts of the world.
In this guide, we will delve into the dynamics of the short-term rental market in Palm Springs, examining key data points and discussing the factors that make it an attractive investment option.
Market Overview
To understand the dynamics of the short-term rental market in Palm Springs, let’s delve into some key statistics and figures.
Supply
The most popular homes are 3-bedroom homes, comprising 40.57% of inventory. This is followed by 4 and 2-bedroom homes at 17.74% and 16.95% of the total inventory, respectively.
Homes Appreciation
AS of July 2025, according to Zillow, homes in Palm Springs experienced an depreciation of -2.24%. This data indicates a significant decrease in property values.
Median Home Value
As of January of 2025, Homes in Palm Springs have depreciated by -2.24%. The median home value in Palm Springs is $638,000 as reported by Zillow. This figure highlights the city’s robust real estate market and the potential for long-term property appreciation.
Active Short Term Rentals
AS of July 2025, Palm Springs boasts a significant Airbnb rental market, with approximately 3,942 active rentals. This abundance of available properties provides ample opportunities for investors and homeowners looking to capitalize on the tourism demand.
Average Daily Rate
The median ADR for the market is $512. The Average Daily Rate is the highest for 5-bedroom homes ($599) followed by 4-bedrooms and 3 bedrooms at $513 and $385 respectively.
Annual Revenue
According to Chalet, short-term rentals in Palm Springs earn an average of $58,433 annually, highlighting the strong investment potential in the city’s market. You can evaluate your properties using our free Airbnb calculator.
How Profitable is Airbnb in Palm Springs ?
AS of July 2025, the average gross yield, which represents the annual income generated by a property as a percentage of its value, is 10.89% in Palm Springs. This figure suggests that short-term rentals in the city offer a favorable return on investment. Palm Springs is ranked #27 by return on investment on Airbnb rentals in the United States.
Property Tax
According to SmartAsset, the average property tax in Palm Springs is 0.94%. This relatively moderate tax rate is an important consideration for those looking to invest in short-term rental properties.
Hosts
The market is dominated by property management firms. The largest is Vacasa Florida with 4.56% of the total inventory and an average review of 4.77⭐️s .
Regulations
Palm Springs short-term rental regulations are somewhat investor-friendly, with different zoning regulations and limitations in place. Understanding these regulations is crucial for potential investors to ensure compliance and a smooth operation.
